My Lords, the Bill spells trouble—trouble between the nations of the UK, and because it sets out a series of criteria for subsidies and limitations on their use which are so vague, complex and mutually contradictory that it is bound to lead to repeated legal challenge.
The Bill is the son of the internal market Act, utilising subsidy powers granted to the UK Government within that Act. The use of those powers will constantly chip away at long-standing devolved powers over economic development, agriculture, housing, and so on. Wales Office Ministers and now Welsh Government Ministers have held major economic development and financial assistance powers since the Welsh Development Agency Act 1975. The Bill dismantles those powers.
I want to concentrate on the inclusion of agricultural subsidies within the general criteria set out in the Bill. It is usual to separate out agriculture, as the World Trade Organization and the EU does, in separate schemes, because the reasons for agricultural subsidy have long been very different. They are about the maintenance and supply of food and very different from the reasons for subsidising, for example, a new engineering plant. Nowadays, we overlay those reasons with complex environmental criteria.
Agricultural subsidies do not fit comfortably within a general framework, and they will be even more difficult to accommodate because the type of agriculture suited in Scotland and Wales to that countryside is very different from that practised, for example, on the plains of East Anglia. The Welsh Government could, for instance, devise a subsidy scheme to encourage the continued farming of marginal agricultural land where only sheep farming is viable. The Secretary of State, however, has such broad call-in powers that they could be used in this case on the grounds that it was an unfair competitive advantage to Welsh sheep farmers over English sheep farmers.
In due course, we will challenge these criteria, as we will challenge the concentration of power in the hands of the Secretary of State, who once again will act as Minister for England at one moment and a UK umpire at the next—an impossible balance to strike. That problem is exemplified by the additional scrutiny powers concentrated in the Secretary of State’s hands, whereby he can call in schemes devised by the Welsh Government, but Welsh Ministers have no powers to apply similar scrutiny and control over schemes devised by the Secretary of State for England.
Finally, we seek clarity as to where the common frameworks devised by Defra, which create an even-handed approach across the nations, fit into this. It seems to me that those common frameworks are incompatible with the Bill, and that the Bill will need to be amended to accommodate the principles that underlie them. As the Bill stands, there is no clarity of purpose, no levelling-up mechanism and no industrial strategy to underpin it. In the Brexit debate, Wales was
promised that we would not lose money. That was, of course, untrue. Two-thirds of Wales was an assisted area, and that funding has gone. Without that funding, the Welsh Government need other powers and mechanisms to attract investment, and subsidy schemes must be an important part of that.
This Bill is an embarrassing back-of-the-envelope Bill, and every nation of the UK deserves much better.
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